Japan: The recovery of Japan’s economy took longer than anticipated in the fourth quarter of 2022 even though the country’s borders were reopened.

According to government data released, the second-largest economy in Asia expanded by just 0.2 percent between October and December 2022, suggesting that the global economic slowdown may be hindering the nation’s recovery.

After two and a half years of arguably the strictest travel restrictions in the world due to the pandemic, Japan welcomed the return of mass tourism. Before the country closed its borders in response to the entrance of COVID-19, a record 31.9 million foreign visitors arrived in Japan in 2019.

Policymakers expect that an increase in domestic consumption would result in higher salaries to help households cope with rising food and fuel prices. Consumer prices in Japan increased by 4 percent year over year in December 2022, the sharpest growth rate since 1981.

The Bank of Japan (BOJ) has defied the global trend of raising interest rates despite growing inflation by maintaining an ultra-accommodative monetary policy to spur development. Mr. Haruhiko Kuroda, the outgoing governor of the BOJ who will step down in April 2023, has stated that he favours an extremely loose monetary policy up until major wage increases.

it is anticipated that Prime Minister Mr. Fumio Kishida would propose Mr. Kuroda’s replacement. It is expected that Mr. Kazuo Ueda, an economics professor at Kyoritsu Women’s University and a former member of the BOJ policy board, will assume the position.

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